EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0942794
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Halliburton Australia applied for a TCO in respect of certain injector systems on 12 November 2009.
Instrument
TCO No 0942794 was made on 29 January 2010. It declares that those certain injector systems are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0942794 is taken to have come into force on 12 November 2009.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0942794, enacted under the Customs Act 1901, was introduced to provide a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on specific goods, thereby reducing or eliminating the customs duty payable on those goods. This legislation aims to address the need for targeted relief on certain imported goods to support industries that may be disadvantaged by locally produced alternatives or to facilitate the importation of goods that are not currently produced within Australia. The instrument was enacted by the Parliament of Australia and seeks to achieve the policy objective of providing a streamlined process for tariff concessions, thereby promoting trade efficiency and supporting economic interests.
The instrument was triggered by an application from Halliburton Australia for tariff concessions on certain injector systems. Following the application and subsequent evaluation by the CEO of Customs, it was determined that no substitutable goods were produced in Australia, thus meeting the core criteria for a tariff concession. Consequently, the CEO issued Tariff Concession Order No. 0942794, effective from 12 November 2009, under which the general rate of duty for these injector systems was reduced to free. This decision was made without any objections from the public, as no submissions were received in response to the notice published in the Gazette. The order does not affect any existing rights or impose new liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901 applies to the process of applying for and granting Tariff Concession Orders (TCOs), which provide for lower rates of customs duty on specific goods. The Act specifically concerns individuals or entities applying for TCOs on behalf of goods that are not produced in Australia and do not have substitutable goods produced locally. This legislation is pertinent to the importation of goods, and it applies across the Commonwealth of Australia, as it is a federal Act. The Act does not specify exclusions, exemptions, or thresholds but ensures that the TCOs do not disadvantage any person other than the Commonwealth nor impose liabilities on individuals or entities for actions taken before the TCO was registered. Additionally, the scope of the Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which defines the specific rates and items affected by TCOs.
Key Provisions
The main operative sections of the Customs Act 1901 (section 269C and section 269P) require the Chief Executive Officer of Customs (CEO) to assess applications for Tariff Concession Orders (TCO) against certain core criteria. Specifically, section 269C mandates that a TCO application meets the core criteria if, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order (section 269P(3)), declaring that the goods in question are subject to a prescribed tariff item, thereby applying a specified rate of customs duty.
The Act imposes several obligations on the CEO and applicants for TCOs. For the CEO, these include publishing a notice in the Gazette (section 269K(1)) inviting submissions from any interested parties as soon as practicable after accepting an application as valid. The CEO must also ensure that the application is not in respect of goods specified in section 269SJ of the Act, which are ineligible for a TCO. The applicant, meanwhile, must ensure their application provides sufficient evidence that no substitutable goods are produced in Australia in the ordinary course of business. In the case of TCO No. 0942794, no submissions were received in response to the Gazette notice, indicating that the CEO did not receive any objections to the concession.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches of the TCO provisions. However, any failure by the CEO to adhere to the statutory requirements, such as not publishing a notice in the Gazette or not properly assessing an application, could lead to legal challenges or administrative penalties. The CEO’s decision-making process is subject to judicial review under the Administrative Decisions (Judicial Review) Act 1977, which may result in orders for the CEO to reconsider or correct decisions. For applicants, any misrepresentation or failure to provide accurate information could be considered an administrative error or misconduct, potentially leading to the rejection of the application and denial of the TCO.